Business reporter

A decision to drop tax and money laundering charges against three high-profile Sydney businessmen is ''another humiliating defeat for the Project Wickenby Keystone Cops'', according to a lawyer close to the trio.

Charges attracting jail of up to 25 years, laid against former CVC Limited chairman Vanda Gould, former Sunland chairman John Leaver and Swiss resident Peter Borgas, were withdrawn by the Commonwealth Director of Public Prosecutions in Sydney Local Court on Tuesday morning.

The men asked the court to order the Crown to pay their costs in defending the charges and a mention date was set for June 10.

Former Sunland chairman John Leaver. Photo: Robert Rough

They were arrested in October after an investigation by Project Wickenby, the joint Taxation Office-Federal Police taskforce that attacks the use of tax havens by rich Australians.

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It was alleged they used a complex network of companies in tax havens including Vanuatu, the Bahamas and Singapore, to avoid millions in Australian tax.

Barrister John Hyde Page, who represented the companies in a related Federal Court civil case, said the amount of public money spent on Wickenby was a ''scandal''.

Said the amount of money spent on Wickenby was a "scandal": Barrister John Hyde Page. Photo: Supplied

''Their contempt for civil liberties and due process is disgusting,'' he said. ''At the very minimum there needs to be full public inquiry into every aspect of how this unit operates and in particular the people who run it.''

He declined to comment on the Federal Court case, in which a network of offshore companies associated with Mr Gould challenged Tax Office bills of about $40 million. Hearings are completed and the parties are awaiting judgment from Justice Nye Perram.

The ATO alleged the network of companies invested in Australian shares, including those of companies chaired by Mr Gould, and then sent the proceeds offshore without paying any Australian tax.

Mr Gould has long denied any wrongdoing or tax avoidance, saying the majority of the proceeds of the offshore network were distributed to charities in Australia, Africa and Asia.

The civil case also caused ructions in the relationship between Australia and the Cayman Islands when formerly secret company documents showing Mr Gould controlled two Caymanian companies were tendered as evidence despite a court in the Caribbean tax haven ruling they could not be used.

Mr Gould was on Tuesday reappointed as chairman of investment company CVC, a role he resigned following his arrest.

In a statement, Mr Gould's solicitor, Justeen Dormer, said the charges had caused ''months of disruption to Mr Gould's life''.

''I am pleased that the charges against Mr Gould have been dropped and he can now return to the work and philanthropic pursuits to which he has dedicated his life,'' she said.

In addition, he was chairman of CVC spin-off CVC Property Fund and biotechs Cyclopharm and Vita Life Sciences.

Mr Leaver, who resigned as a director of CVC, does not intend to rejoin the board.

The ATO regards Project Wickenby as a success, boasting on its website it has raised more than $786 million in cash from targets.

However, it has been bitterly opposed by targets including actor Paul Hogan and music promoter Glenn Wheatley, and criticised by the Australian National Audit Office for taking too long and costing too much.